APIs are increasingly becoming the cornerstone of more and more businesses. The rise of API-First companies, like Uber, Stripe or Twilio, has made the API product approach the norm when it comes to a successful API business strategy. Many businesses can benefit from APIs. Here's a guide of how APIs can make your business thrive.
In 1999 we entered the Web 2.0 world with increased information sharing and interconnectedness. The Web became a platform providing applications. And APIs became the operating system for the web.
The major business success stories of the past 20 years are underpinned by APIs. Like the rise of FAANG (Facebook, Apple, Amazon, Netflix, and Google (now Alphabet)) and industry disruptors such as Airbnb, Uber, stripe, and Twillio.
In 2021 it is widely accepted that you need APIs to do business. APIs not only provide a competitive advantage by creating new revenue streams. They also improve efficiency, innovation, and customer satisfaction. They are an integral part of business strategy and scalability.
No matter the size of your business or the industry you’re in, APIs can impact your business performance:
- Large enterprises are using APIs to achieve success through digital and agile transformations.
- Small and midsize companies can leverage API technology and access customers before only available to big budgets.
- Partnerships are enabled through APIs at a scale never before accessible.
- Entire industries are facing disruption and need to get on board with APIs for survival.
Here’s how APIs can make your business better than average no matter which API strategy you use:
APIs can create business growth by creating new sources of revenue through products and partnerships.
Grow revenue with API products
APIs are more than a technical tool. They can be value-creating products in their own right.
As APIs are created to solve business needs, they can be sold as Software-as-a-Service (SaaS).
The right business model needs to be considered for your APIs as they can create numerous sources of value. On top of direct monetization, APIs create additional sources of value through:
- New sources or access to data that can create revenue
- Time savings and
The rise in API-first businesses like Twillio and Stripe shows what is possible when making your business better than average using APIs.
Grow opportunity with API partnerships
Integrating partner data has been notoriously difficult. The difficulty meant partner relationships had to be built slowly. Onboarding new relationships had to happen one at a time.
APIs make partnerships easier than ever before.
Now complex webs of relationships can form entirely new ecosystems of suppliers and consumers. Data can be exchanged securely by authorized users. And new partners can be onboarded and supported through self-service portals.
These partnerships create opportunities for:
- Entry into new market adjacent business
- Expanded value proposition and
- New offerings
Optimize business performance with APIs
The Harvard Business Review outlines how businesses perform better than average.
“Competitive advantage comes from reading and responding to signals faster than your rivals do, adapting quickly to change, or capitalizing on technological leadership to influence how demand and competition evolve.”
APIs can support all aspects of competitive advantage.
Digital and Agile organization
Gartner reports 91% of businesses are in some form of digital transformation. Businesses know, to compete in the digital economy, they need to transform. This transformation is both adopting new technology and reorganizing their business to be agile.
While businesses know they need to transform, the Everest group reports 73% of digital transformations to fail. One of the biggest hurdles for digital transformations is legacy systems. These systems are integral to business operations.
APIs can solve this hurdle and help digital and agile transformations succeed. APIs provide a simple solution to connect internal systems.
This flexibility and access to data can:
- support automation
- speed up delivery
- allow companies to reorganize into an agile structure
Overcome skills shortage
The tech skills shortage is nothing new. Since 2008 companies have been reporting a shortage of people with technical skills. The Covid pandemic has only made this challenge worse.
APIs can remove the bottleneck created through a shortage of technical skills. APIs help teams leverage prebuilt functionality by creating standardized technology. They reduce the need to recreate functionality that already exists. This helps to create the space to focus on new functionality sooner and speeds up the time to market.
APIs are like amazon prime for big data. They help package and deliver data in a way that adds instant value.
Companies that use data for decision-making outperform their competitors. They can identify trends, business drivers and improve customer experience.
APIs can combine data sources and access external data seamlessly. This creates the opportunity for deeper insights to improve both planning and business processes.
More than that data can help forecast scenarios and identify what’s not working so you can adapt quickly.
Security and compliance
Global cybersecurity services are predicted to grow to a USD 192.70 billion market by 2028. With increased digitization, the threat and complexity of cybersecurity attacks are growing too.
LinkedIn recently suffered a security breach where data from 92% of their users was exposed. This is the 2nd security breach in 2021. It’s been reported the breach came from use of the official LinkedIn API. It’s estimated a LinkedIn breack in 2012 cost the company over $1m through investigtion and data recovery.
A data breach of Yahoo, the biggest data breach in history, reduced the value of the company by $350 million.
Another way to perform better than average is to differentiate your cybersecurity.
APIs, when created with security in mind, can prevent access to the source system of record. They add access controls and an audit trail. In this way APIs can help protect your company's data while maximizing its use.
Staying on top of regulation changes is essential to maintaining a competitive edge. Failing to do so means incurring penalties and potential legal issues, which could cause you to fall behind your competition.
APIs are helping companies meet new data-sharing regulations for GDPR, Open Banking, and Healthcare. This is just the start of APIs’ influence on regulation.
Better than average
In the past 20+ years living in the Web 2.0 world, companies using APIs have performed better than average.
API businesses both save and avoid costs. They can execute tasks faster, automate activities and avoid duplicating work with customization. They avoid costs by integrating data with ease.
At the same time, API businesses create new sources of value. They do this by creating strategic partnerships at scale and with new API products.
API businesses have numerous avenues for disruption and innovation that set them apart from other businesses.
As we adapt to Web 3.0 with increased AI opportunities, APIs continue to underpin business success. While it may feel like APIs have been around for a long time, we are still in the early stages of this technology. The opportunities for better business performance are endless.
Find out how Blobr can help your business perform better than average with APIs by talking to our experts.